Bitcoin Price Watch: Weak Support Zone Just Close By
Bitcoin Price Key Highlights
- Bitcoin price continues to slide and is cruising inside a descending channel on the 1-hour chart.
- Price is approaching the bottom of this channel but it might not be strong enough to keep losses at bay.
- Oscillators are hinting at a bounce but moving averages suggest a break.
Bitcoin price could be due for a test of the descending channel bottom, which might still give way if bears stay strong.
Technical Indicators Signals
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is still to the downside. In other words, the selloff is more likely to resume than to reverse. The 100 SMA is also in line with the channel resistance to add to its strength as a ceiling.
However, RSI is starting to pull up from the oversold level to signal a return in buying momentum. Similarly, stochastic is indicating oversold conditions so sellers might allow bulls to take over from here. If so, a bounce off the $8000 level could be in order, spurring a move to the $8400-8500 channel top.
Investors seem to be holding out for more positive bitcoin updates before reestablishing their long positions, and it looks like the expected selling of Mt. Gox bitcoin is keeping bears in play.
Recall that the exchange has yet to liquidate most of its bitcoin holdings in order to pay off creditors, and this selling pressure could lead to more losses for bitcoin price from here. It doesn’t help that geopolitical risk and dollar demand are also in place.
The dollar shrugged off weak April retail sales as investors focused on the pickup in underlying prices and the positive revision to March data. This has allowed US bond yields to tick higher on revived tightening prospects, lifting the dollar across the board in the process.
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